Municipal Service reviews were added to LAFCOs mandate with the passage of the Cortese-Knox-Hertzberg (CKH) Local Government Reorganization Act of 2000 (Government Code §§ 56000 et seq). A service review is a comprehensive study designed to better inform LAFCO, local agencies, and the community about the provision of municipal services. Service reviews attempt to capture and analyze information about the governance structures and efficiencies of service providers and to identify opportunities for greater coordination and cooperation between providers. The service review is a prerequisite to a Sphere of Influence  determination and may also lead a LAFCO to take other actions under its authority.

Upon completing the service reviews, the Commission must make determinations on each of the following issues:

• Infrastructure needs or deficiencies.
  
  
• Growth and population projections for the affected area.
  
  
• Financing constraints and opportunities.
  
  
• Cost avoidance opportunities.
  
  
• Opportunities for rate restructuring.
  
  
• Opportunities for shared facilities.
  
  
• Government structure options, including advantages and disadvantages of consolidation or reorganization of service providers.
  
  
• Evaluation of management efficiencies.
  
  
• Local accountability and governance.